[Updated, April 8, 9:50 a.m.:Macy's confirmed that mediation efforts did not result in a settlement and that John Tighe, an executive with J.C. Penney, is currently testifying.]

In late morning trading in New York, Macy’s stock was up 1.5%, or 65 cents, to $44.04 a share. J.C. Penney’s also got a bump, up 1.9%, or 29 cents, to $15.74 a share. MSLO slipped 2%, or 5 cents, to $2.36 a share.

J.C. Penney is in the midst of a brand revamp, as Johnson tries to shake off criticism of his management while reversing sliding sales, slashing jobs, freshening product assortment and experimenting with the chain’s discount strategy.

The 110-year-old company has a “great brand” but peaked decades ago and has recently been “dying slowly,” Ackman said. Johnson, he said, is “working very aggressively with his team” to pull off “one of the most difficult kinds of business turnarounds.”

But Ackman said that so far, “there’s been some very big mistakes,” among them a lack of thorough testing before making sweeping changes in the retailer’s operations.

“The impact has been… something very close to a disaster,” Ackman said.